Oftel dismisses Freeserve BT complaint

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BT's broadband marketing does not breach the Competition Act, Oftel has ruled.

The regulator investigated BT's tactics after a complaint from Freeserve alleging that BT was behaving anti-competitively by using its 'blue bill' and '150' customer service line to market BT Broadband products. BT's joint telephony and Internet billing packages are also anti-competitive, Freeserve further alleged.

Following an investigation, Oftel ruled today that these practices did not give BT an unfair advantage over its competitors, such as Freeserve.

The use of the BT retail '150' customer support number as a sales and marketing channel for BT Broadband is not a threat to competition, the regulator ruled.

"Oftel's investigation showed that the number of consumers taking BT Broadband as a result of '150' marketing was sufficiently low not to have a material adverse effect on competition," it says.

The regulator ruled that BT's practice of bundling promotional material for BT Broadband with residential phone bills isn't a competitive threat either. This is a scatter-gun approach, the regulator reasoned, and BT's "competitors can more specifically target likely broadband users by using direct marketing at a similar or lower cost".

Oftel concludes that the benefits of offering a joint billing (or 'blue bill') service, where telephony and broadband bills appear on the same bill, "can be easily replicated using credit card payments or direct debit".

David Edmonds, Director General of Telecommunications, commented: "Oftel looked at each of the issues raised by Freeserve, and considered them in detail. In this instance we have concluded that BT's marketing activity using the 'blue bill' and '150' customer service line does not prevent Freeserve competing on a fair basis."

The Director General's decision on the Competition Act investigation into BT can be found on Oftel's Web site.

No-one at Freeserve was available for immediate comment on the ruling.

Relations between Britain's biggest French ISP and the regulator have been strained of late after Freeserve appealed Oftel's ruling on a separate complaint it made to the Competition Appeals Tribunal (CAT), the UK's highest specialist competition law court.

The CAT's April ruling upheld Oftel's decision on three of the four points of contention. However the CAT told Oftel to look again at allegations of predatory pricing in the broadband sector by BT, after ruling that the regulator's initially inquiry was insufficiently thorough.

Both Oftel and Freeserve have claimed victory in the dispute and the row between the pair has rumbled on through the letters columns of the broadsheets. ®